Bloomberg: Eastern Europe’s Richest Woman Pivots Her Empire West

Since taking control of the PPF conglomerate three years ago, Renata Kellnerova has overseen its expansion and retreat from Asia.

When the richest man in Eastern Europe died in a helicopter crash, hardly anyone knew his wife’s name. 

Nearly three years later, that’s no longer the case. Renata Kellnerova is now synonymous with the family business — a Prague-based telecommunications, media, financial services and e-commerce empire that employs 61,000 people and operates in 25 countries.

In the region, PPF is perhaps best-known as the owner of private TV stations in six countries across Eastern Europe, and of one of the Czech Republic’s largest phone companies.

With $43 billion in assets, PPF has emerged as one of the main winners of the Czech Republic’s post-communist transition, a success that Kellnerova’s late husband Petr Kellner leveraged by expanding into the fast-growing markets of Russia and China. But with Russia’s invasion of Ukraine upending geopolitics and business, many companies, including PPF, are now prioritizing growth closer to home.

In an email exchange with Bloomberg News — her first public comments to media since taking over PPF — Kellnerova recounted the challenging period she spent familiarizing herself with the company’s complex operations after the sudden death of her husband.

“The first priority was to secure the stability of PPF, and then start developing the business again,” she said. “I realized that PPF is personal for me and that my task is to prepare our children so that they will have the possibility of taking leadership of the group one day themselves.”

Since assuming control, the 56-year-old has put her imprint on the company. She’s overseen a major move away from Asia — once a key source of income — and has shifted attention back to western markets. She’s chosen a new chief executive officer and parted ways with some of her late husband’s close allies. She brought the company under full family ownership by buying out two minority shareholders, thennamed herself and her three daughters tothe board of a new holding company housing all of their assets. 

Now the region’s wealthiest woman, with her family’s net worth estimated to be around $11.8 billion, according to the Bloomberg Billionaire Index, Kellnerova has been dedicating more and more time to making key investment decisions. She cites her close cooperation with PPF CEO Jiri Smejc, one of Kellner’s former investment partners, as central to her approach. 

“If the situation requires it, we are able to make decisions about deals in just one weekend,” she said. “We pride ourselves at PPF on being very flexible in reacting to investment opportunities.” 

Under Kellnerova, PPF has finalized several large transactions, including agreeing to a €2.15 billion sale of a controlling stake in telecommunication operations across Eastern and Central Europe to Abu Dhabi’s Emirates Telecommunications Group Co. The company’s consumer finance division, Home Credit Group BV, also agreed in 2022 to sell its Philippine and Indonesian businesses in deals worth about ‎€615 million ($669 million). 

This helped boost PPF’s profitability to pre-pandemic levels, with a first-half net income of €709 million in 2023. That’s compared with a €406 million loss the year prior, mostly due to a costly withdrawal from Russia.

While there is no exact timeline yet for the complete exit from Asia, “the core focus of our business has been moving west in the past three years,” Kellnerova said.

With extra cash on hand and higher interest rates weighing on valuations of privately-owned and publicly traded assets, PPF is scanning Europe for new acquisition targets. Its biggest purchase yet has been taking a stake in InPost SA, a Polish e-commerce company that operates self-service delivery lockers, and building a stake in German broadcaster ProSiebenSat.1 Media SE.

Like her late husband, Kellnerova keeps a low public profile and closely guards her family’s privacy. She would not disclose specific investment targets that her company has or might be watching. PPF plans to maintain its four primary investment pillars – financial services, telecommunications, media and e-commerce — but, she noted, “that doesn’t rule out smaller opportunistic investments.”

Because the group isn’t a typical investment fund with a defined horizon for holding onto its assets, “we can be patient,” she said. “That’s why short-term returns aren’t the primary parameter when we are considering an investment opportunity.”

PPF, now an intricate network of companies, began its ascent shortly after the fall of communism. Kellner founded the company in the early 1990s, when what was then Czechoslovakia started selling state assets through a program that issued vouchers which people could either exchange for shares in companies or place in funds.

In 1991, Kellner set up a fund to acquire stakes in 202 companies. It ended up handling the sixth-biggest batch of assets available at the time, according to the firm, which then became known as PPF Group. Over time, PPF built a 20% stake in Ceska Pojistovna, the country’s largest insurer, creating the foundation of Kellner’s wealth. He cashed out in 2013, selling the insurance assets to Italy’s Generali in a $3.3 billion deal.

As Kellner built up his empire, his wife was occupied with the Kellner Family Foundation, one of the Czech Republic’s first philanthropic organizations, which has donated nearly 2 billion koruna ($89 million) to social projects and scholarships. Kellnerova brings this perspective to her new perch, describing PPF as having “social responsibility that reaches beyond the sphere of business.”

Alongside PPF, the post-communist sales of state assets gave rise to a handful of other super-rich Czech families, including property magnate Radovan Vitek, one of Europe’s largest real-estate investors, and energy tycoon Pavel Tykac. Companies owned by billionaires residing in the Czech Republic now employ tens of thousands of workers across the continent and have played a crucial role in the region’s economies. 

At the same time, they have drawn scrutiny. In an interview late last year, former Czech President Milos Zeman criticized the privatization process for creating a sharp wealth gap in the former communist nation. Zeman was nevertheless a major backer of Kellner, and even awarded him the highest state honor after the tycoon was killed in a helicopter crash during a trip to Alaska.

“I really valued Petr Kellner, we worked well together,” said Zeman.

PPF also came under fire from the local investor community when it moved to pull the country’s biggest traded phone company from the Prague stock exchange, decreasing its market capitalization but giving the group full control. The process was finalized in 2022. 

While most close associates and former employees have kept quiet about PPF’s new leadership, one of PPF’s former minority owners, Ladislav Bartonicek, shared his view in an interview with the country’s biggest business daily newspaper, Hospodarske Noviny, in September. 

“The responsibility for Renata, who is very actively involved, and for the second generation, is different,” he told the newspaper. “It’s no longer a one-man company — in a good way. The shareholders will be more conservative. It’s a question of who on the family side will be the most involved in the future.”

Kellnerova’s former and current business partners declined to be interviewed for this story. Of her three daughters, the only one with a public profile is Anna, a 27-year-old show-jumping rider who competed in the 2020 Summer Olympics in Tokyo.

The company has long prided itself on its tight-knit culture, and Kellnerova’s desire, she said, is that the family remain the majority owner of PPF for decades to come. With her children in various stages of life, she wants to let them gain insight into the company’s operations.

“When they are ready, I will hand over the main responsibility to them with a clear conscience,” she said. “I’m not concerned about the future, because they are already taking part in running our companies to some extent now.”

By Peter Laca and Andrea Dudik

https://www.bloomberg.com/news/articles/2024-02-05/eastern-europe-s-richest-woman-pivots-her-empire-west